http://musingsonwallstreet.blogspot.hk/2013/08/gold-and-silver-is-finding-bottom.html
I warned that the long XAUUSD and XAGUSD trades may just be a short term one. It is a pure technical trade because the fundamentals do not look in favour of precious metals. Here are the pros and cons:
Pros:
1. Physical buying has increased, especially in Asia.
2. Debasement of currencies still ongoing.
Cons:
1. Inflation is still low. Inflation expectations are still low too.
2. 10 year UST yield is rising to 2.9%. If it passes 3%, it may be more profitable for the risk averse investors to buy long term bonds than holding on to gold.
I've closed my XAGUSD trade at 23.00. I started at 19.50. I closed my XAUUSD at 1350. I bought at 1300. I didn't make much. Just 18% for XAGUSD and 3.8% for XAUUSD. After transaction costs the returns for the XAUUSD trade is negligible but for XAGUSD, it is still at 16 - 17%. Not bad for a month of trade.
